Congressional plans for Medicaid would have outsize impact on rural, elderly Missourians

A new study shows the percentage of rural elderly Missourians who are dependent on Medicaid services is twice that of urban elderly residents.

The research titled “Medicaid’s Role for Seniors Living in Small Towns and Rural Areas” from Georgetown University’s Rural Health Policy Project reveals 18 percent of aging citizens in the state’s rural communities are on the federal health program versus nine percent in metropolitan areas.

Joan Alker – Executive Director of the Center for Children and Families and a Research Professor at the Georgetown University McCourt School of Public Policy. (Photo courtesy of Georgetown University)

Joan Alker, research professor at the Georgetown University McCourt School of Public Policy, says the figures represents the biggest gap among all states. “You can see that’s a big gap, and it was actually the largest gap in the country between Medicaid coverage among metro and non-metro seniors” said Alker.

Because nearly one-in-five rural seniors in Missouri are dependent on the federal program, they’ll be disproportionately impacted by healthcare overhaul legislation in Congress. There are two bills – one that passed the House, and one under consideration in the Senate.

Although both have been presented as repeal and replace measures to do away with the Affordable Care Act, both of them also severely restrain spending for traditional Medicaid. The House and Senate plans would replace the current open ended funding with a fixed rate for each enrollee, which is known as a per capita cap.

(States would also be able to opt for block grant funding of Medicaid services, but not for senior coverage.)

Further, both measures would shrink the program over time by pegging annual growth to lower inflation rates. The annual rate of inflation for Medicaid is 4.4%. But the House bill ties the program to overall medical inflation of 3.7% while the Senate plan is tethered to the standard inflation rate of 2.2%.

The Congressional Budget Office has estimated these changes will lead to an $840 million cut to Medicaid in the House bill, and a $772 million decrease in the Senate measure.

Either option would limit federal responsibility and shift responsibility for financing the growth of the program to the states, which Alker says will have a devastating effect.

“There’s no way that any state can absorb that kind of cut without having to rollback services. We would also expect they may have to make cuts in other areas of their state budget as well.”

Medicaid is the largest source of federal funding for all states. In Missouri, the program accounts for nearly a third of the state’s $27.7 billion budget.

51% of Medicaid funding comes from the federal government, while the federal match is $1.72 for every $1.00 spent by the state. The legislature previously passed a law requiring medical providers to pick up 32 percent of the Missouri’s Medicaid costs.

Alker thinks the state is going to be faced with some tough decisions if the current Republican plans are enacted.

“Missouri’s governor and legislature will face really tough choices. They’re going to have to either raise taxes, or they’re going to have to start cutting their Medicaid services. They might have to start trimming away at some of the benefits, or rollback some of the population that are eligible today. Or they may have to cut rates to providers.”

Cutting rates to providers could adversely affect small towns and rural areas where hospitals are financially stressed. Missouri is one of seven states where Medicaid is disproportionately important to seniors living in those areas according to the Georgetown University study, along with Alaska, South Carolina, Mississippi, Alabama, Arizona, and Maine.

Alber thinks that, given the Medicaid cuts being proposed in Congress, older people in the Show Me state’s rural areas would be vulnerable. “I think what this research is showing is that, particularly in Missouri, senior who live in the small towns and rural areas have the most to lose.”

The Medicaid program was adopted in 1965 to offer medical assistance to low income children, pregnant women, disabled and seniors. Democratic President Lyndon Johnson signed it into law in the Kansas City suburb of Independence.

Under the Affordable Care Act, states had the option to expand the program to include able bodied individuals. Missouri declined to do so.